No Penalty can be Levied on Cash Deposits if Assessee explained Source

Deoyani Movies Pvt. Ltd. Vs ITO (ITAT Pune)

No Penalty can be Levied on Cash Deposits if Assessee Explained its Source from Earlier Withdrawal and Recorded in Books of Accounts

Simply because cash deposited in the bank is a little more than the cash sales, it cannot call for any addition, what to talk of penalty, unless it is proved that the excess cash deposited had no origin. Where the assessee tenders explanation that the excess cash deposit represented cash withdrawals at the earlier stages, there can be no question of making any addition and the consequential penalty, moreso when the entries of cash deposits and withdrawals are recorded in books of account regularly maintained by the assessee and that are not found fault with by the AO. We, therefore, setaside the impugned order and delete the penalty sustained in the first appeal.

FULL TEXT OF THE ITAT JUDGEMENT

This appeal by the assessee is directed against the order passed by the CIT(A)-2, Aurangabad on 19-03-2019 confirming penalty of Rs.1,38,772/- imposed by the Assessing Officer (AO) u/s. 271(1)(c) of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) in relation to the assessment year 2009-10.

Please become a Premium member. If you are already a Premium member, login here to access the full content.